Financial regulators in Japan have urged global regulators to treat crypto the same way as they do banking, calling for tougher rules for the sector.

According to the deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, crypto needs to be controlled.

“If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions,” he said according to a Jan. 17 Bloomberg report.

The comments from Japan’s financial watchdog come in the wake of the collapse of FTX in November, which rattled the industry and sparked urgency for regulatory action.

Unlike some of his U.S. counterparts, Yanase has acknowledged that the problem wasn’t with crypto. “What’s brought about the latest scandal isn’t crypto technology itself,” he said before adding “it is loose governance, lax internal controls, and the absence of regulation and supervision.”

He said that regulators in the U.S. and Europe have been urged to enforce the same rules for crypto exchanges as they do for banks and brokerages.

The recommendations have been pushed through the Financial Stability Board, a global organization tasked with the regulation of the digital asset industry.

Yanase added that countries “need to firmly demand” consumer protection measures from crypto exchanges. Demands were also laid down for money laundering prevention, strong governance, internal controls, auditing and disclosure for crypto brokerages.

「当社におけるお客様の資産の管理状況等について（1月16日時点）」お知らせを掲載致しました。こちらをご確認ください。https://t.co/Y9D2RQAsgB

— FTX Japan (@FTX_JP) January 16, 2023

Yanase made the comments while confirming that the Japanese subsidiary of FTX is expected to resume withdrawals starting in February.

“We have been in close communication with FTX Japan,” said Yanase, explaining that that “client’s assets have been properly segregated,” from the subsidiary.

Related: Approach with caution: US banking regulator’s crypto warning

The court presiding over the FTX case agreed to the sale of FTX Japan among other company subsidiaries. Last week, Cointelegraph reported that there were 41 parties interested in buying the Japanese branch of the exchange.

On Jan. 16, Monex CEO Oki Matsumoto said that they were interested in buying FTX Japan, adding that it would be a “very good thing” for them if there was less competition within the local market.